Obama Prepares to “Screw Over” Young Adults

President Obama we are told has built the mythical “permanent majority.” He has captured the hearts and minds of a coalition of disparate interest groups that will allow his party to ride a dynastic wave of success.

A crucial piece of that puzzle was the support of young adults, who carried him to victory in 2008, and, though in far fewer numbers, helped him get reelected in 2010. This generational support is utterly crucial to his party’s sustained success. That much is clear. Why he’s using Obamacare to screw over a generation to which he owes his success is not.

“Imminent elements of Obama’s grandest policy move, the health-care overhaul known as ObamaCare are calculated to screw his most passionate supporters and to transfer wealth to his worst enemies.

The passionate supporters are the youth, who voted for him by a margin of 60% to 36%, according to exit poll samples of people 29 and under. His enemies are the elderly: Mitt Romney won 56% of the votes from people 65 and over. And while one of ObamaCare’s earliest provisions was a boon to the young, allowing them to stay on their parents’ insurance through the age of 26, what follows may come as an unpleasant surprise to many of the president’s supporters. The provisions required to make any kind of health insurance plan work – not just ObamaCare, but really any plan of its sort – require healthy young people to pay more in health insurance than they consume in services . . . There is always a push and pull, however, and this year will be spent laying plans to shift the burden further toward the young.”

The worst way ObamaCare screws young adults is by limiting a process that insurers call “age rating.” It shouldn’t come as a surprise to anyone that older, sicker Americans cost more to insure because they use more health care. Younger, healthier people are likewise cheaper to insure. Indeed, actuaries – a fancy name for the people who study the economics behind this kind of stuff – tell us that older people are generally about five times more expensive to insure as younger people.

Being the sensible entities that they are insurance companies have typically compensated for this fact by having a spread of premiums that is, at least in part, tied to your age. But Obamacare throws that all out the window. The law mandates that regardless of the actual cost of insuring an age group the maximum spread can be at most three-to-one. That means an insurance company can only charge an older adult three times what they charge a younger one.

In short, it’s redistribution. Only worse, because when we generally think of redistribution we think from richer to poorer. Except in this case older Americans are on average vastly wealthier than young adults. And the potential financial impacts on young adults is astounding. Some estimates have premiums rising by as much as 40 percent – a spike that may drive young adults out of the market for health insurance altogether.

Fortunately, Rep. Phil Gingrey has a plan to bill that would fix all of this by preventing the age discount restriction.

“The reality of this Obamacare provision is that young adults will be forced to subsidize the health care costs for older, financially stable, working-age Americans,” Gingrey said in a statement. “At a time when 20-somethings face underemployment, record school debt, and less economic opportunity, it is unfair to saddle them with this burden.”

And yet Obama is doing it anyway. It almost makes you wonder whether or not he takes the support of young adults for granted. Then again, he’s won the last political race he’ll ever run. Perhaps now he feels free to trample over the very constituencies who got him where he is.